News Briefs

GEORGIA

Licensing System Changes

The Georgia Insurance Comm-ission held “Ind-ustry Day Meet-ings” across the state in May to discuss recent changes to the licensing system.

In an effort to be responsive to agent issues and concerns, Commissioner John Oxendine asked Promissor, which regulates initial insurance licensing tests and renewal procedures/tests and qualifications, to join him in a forum for discussion of agent and licensing issues. There was a joint Promissor-insurance department panel to present various topics of interest and during which questions from the audience were answered.

Industry participation was encouraged and by attending this event agents satisfied their 2005 Continuing Education Ethics Requirement at no cost.

Alliance Changes Insurance Education

An innovative collaboration between The National Alliance for Insurance Education & Research and The Profes-sional Insurance Agents of Georgia has resulted in a new insurance education partnership in Georgia called The Georgia Alliance. The two organizations will work together in the conduct of all Alliance programs throughout Georgia.

The administrative agreement includes the conduct of the entire spectrum of National Alliance offerings including Certified Insurance Counselors institutes, Certified Insurance Service Representatives courses, Certified Risk Managers courses, James K. Ruble Seminars and the Dynamics of Sales Training series.

The Georgia Alliance will be directed by PIA of Georgia’s current leadership: Steve Jones, president; Jerry W. Duke, executive vice president; and Carolyn Beierla, education coordinator. PIA of Georgia will be responsible for all National Alliance program marketing and administration in the state. The Georgia Alliance will begin its administrative role this July.

KENTUCKY

Workers’ Comp Fund Receives a ‘Clean Bill of Health’

The Kentucky Office of Insurance has given the Kentucky Workers’ Compensation Fund a clean bill of health after completing an audit of the fund. KESA insures more than 5,100 groups and had 2004 premiums of about $67 million.

Greg Buie, KESA executive director said the fund is financially stable and is “pretty huge.” He described the audit as a “stamp of approval.” The audit is part of an ongoing effort by the Office of Insurance to check all self-insured, workers’ compensation funds in the state.

Of the seven self-insured workers’ compensation funds in Kentucky, the state currently is reviewing two funds in addition to completing the audits of KESA and the Kentucky Association of Counties’ fund. The remaining audits will be started soon and are expected to be completed by the third quarter of this year.

Homeowners’ Premiums Stable

Premiums for homeowners insurance in Kentucky and Indiana aren’t rising as quickly as they did in past years, and some insurers said rates are coming down.

“Rates are staying fairly stable with only small increases,” according to Tracy Bertram, personal lines program manager for the Kentucky Office of Insurance. He expects overall rate increases to average in the single digits this year.

Last year, premiums on homeowners policies in Kentucky rose an average of 12 percent, 5 percent in 2003 and 13 percent in 2002, according to statistics obtained from Office of Insurance records.

At State Farm, the largest homeowner insurer in Kentucky, overall rates were lowered by 6 percent as of April 15.

NORTH CAROLINA

Gov. Declares Hurricane Prep-aredness Week

Gov. Mike Easley proclaimed last week (May 15-21) Hurricane Pre-paredness Week, just as a new survey of residents from Florida to Maine shows that people are unconcerned and not worried about preparing for the hurricane season.

Easley wants North Carolinians to assemble an emergency kit and a strategy before hurricane season, which begins June 1 and runs through Nov. 30.

Between 1980 and 2004, North Carolina ranked at the top of the nationwide list for the number of billion-dollar weather disasters.

He suggested residents should study hurricane evacuation routes, determine how to take care of family pets and establish a contact person to notify in case family members become separated.

Hurricane Gusts Hit N.C. Outer Banks

A storm system which included hurricane-strength wind gusts up to 115 mph hit North Carolina’s Outer Banks early this month as a storm system pushed through North Carolina, bringing with it wind gusts and driving rain.

According to Tony Spencer, Hyde County emergency management coordinator, a 115 mph gust was reported on Ocracoke Island at the state ferry docks. Seas were reported at 20 feet at Diamond Shoals off Hatteras Island and 14 feet off Duck, on the northern Outer Banks.

Robert Frederick, National Weather Service forecaster at the Newport, N.C. office, said a low-pressure system deepened more than forecasters predicted, creating more powerful winds. Nearly five inches of rain fell on Hatteras Island.

Flooding and rainwater made N.C. 12 on Ocracoke Island impassable and about 18 inches of rainwater flooded the streets in the island village.

TENNESSEE

Allstate Testing ‘Your Choice’

Auto Policies

A new auto insurance plan introduced by Allstate Corp. in Tennessee attempts to drive the market away from a price obsession and refocus attention on products and features. Called the “Your Choice” option, the plan promises Tennessee policyholders it will pay for an accident without a rate increase.

“We are giving something to motorists of all demographics something the insurance market has never offered, so our focus is to shift the discussion away from cost,” Michael Brewer, Allstate’s senior communications consultant in Nashville said. “The advertising message has always been about price, but insurance is not a commodity. We want people to realize that.”

Allstate is introducing the plan in Tennessee, Utah and Oregon. The product will be refined based on those results.

Tennessee was chosen as a debut market, Brewer said, because it has a mix of urban, suburban and small towns that provide the best cross-section for evaluating new products.

The rates drivers pay will still be based on underwriting standards. Among the features Allstate is now offering are:

• Accident forgiveness, either once, or one time every three years. Typically, drivers only get preferred rates if they’ve had no claims in three years.

• Deductible rewards, which shave $100 off the deductible for each year of accident-free driving.

• Auto replacement for cars that are totaled, rather than just paying the book value.

• Safe driving bonuses at each six-month renewal.

• The product was crafted based upon consumer surveys asking what aspects of insurance they find most irritating, and how they would like it changed.

WEST VIRGINIA

State Farm to Write Homeowners, Business Policies

As of May 1, State Farm Insurance began accepting applications from West Virginia homeowners and businesses for new insurance policies. The company is the largest property and casualty insurer in West Virginia and in the U.S.

In July 2002, State Farm announced it had stopped accepting new homeowners insurance applications. In January 2003 it also stopped accepting new business insurance customers in the state. From 1993 through 2003, State Farm incurred nearly $200 million in homeowners and business insurance underwriting losses in West Virginia.

A company spokesperson cited recent changes to the insurance and legal climate in West Virginia for its decision to start writing new business, including several new laws just passed by the West Virginia Legislature. One of the new laws provides more flexibility in allowing insurance companies to non-renew high-risk homeowners. Another new law establishes a “file and use” system of rate approval for commercial business insurance products.

The West Virginia Legislature also modified the doctrine of “joint and several” liability, and abolished the private cause of action for third party lawsuits against insurance companies, bringing West Virginia in line with the law in 44 other states.

Arlene Hogan, State Farm’s operations vice president for the Mid-Atlantic Zone, recognized Governor Joe Manchin and the West Virginia Legislature for their leadership in passing the new laws.

“Governor Manchin is to be commended for his leadership in addressing the problems in West Virginia’s insurance market during his first year as governor. Senate President Earl Ray Tomblin and House Speaker Bob Kiss are also to be commended for their leadership on these issues,” Hogan said. “These reforms will bring more stability to the West Virginia insurance market. This increased stability allows us to begin accepting new homeowners and business insurance customers again in West Virginia.”

State Farm Insurance has 146 independent contractor agents in West Virginia and more than 840 people are employed in State Farm claim offices and agencies throughout the state. It insures 30 percent of all the automobiles and 25 percent of all the homes in West Virginia.